I'm setting up a C-Corporation (its Mid October at time of this writing) and planning a Kickstarter project projecting to raise $100k in funds by late November. As I understanding, KS funds are fully taxable funds.
....and with it being nearly end of the year, I would not have the time to spend (ahem, expense) the KS funds before Dec 31st, so I am considering simply declaring a different close (i.e. June) for my Fiscal Year when I establish the C-Corporation.
What should I be aware of before doing this? Any hidden gotchas and/or complications to doing so other than when my tax filing dates are?
If you fall under the definition of PSC (Personal Services Corporation ), you're specifically required to chose a calendar year unless you make a "Sec. 444 election ", if you're eligible. The election is not trivial, and will require certain things from you.
If you're the owner and the main employee of your corporation - you probably have a PSC.
I suggest you get a good EA/CPA licensed in your state to guide you through this. Don't forget that C-Corps are subjected to double taxation at corporate rates (35% flat for PSC ), and there are additional limitations on PSCs.
How many investors do you have?
I would highly advise against a C-Corp. Go with an S until you must absolutely drop it, your tax advantages are much greater. Not to mention a lot less paperwork burden. Also you can always revert an S-Corp to C-Corp
For S-Corp you need calendar year, or specially approved tax year, so unless there is an absolute need for change keep calendar year
For C-Corp it's whatever you choose
Also realize choosing a different fiscal year period doesn't change when tax returns are due
You still must pay quarterly
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Asked 7 years ago
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